Hull v. Fitz-Gerald, FITZ-GERALD

• Decision Date: 27 March 1950
• Docket Number: FITZ-GERALD,No. 6029,6029
• Parties: Blue Sky L. Rep. P 70,146 HULL et al. v.
• Court: Texas Court of Appeals

Page 93

232 S.W.2d 93

Blue Sky L. Rep. P 70,146

HULL et al. v. FITZ-GERALD.

No. 6029.

Court of Civil Appeals of Texas, Amarillo.

March 27, 1950.

Rehearing Denied May 8, 1950.

Martin, Moore & Brewster, Fort Worth, Alvin R. Allison, Levelland, for appellants.

Turner, Rodgers, Winn & Scurlock, Dallas, Gerald Fitz-Gerald, Midland, Texas and Lloyd Croslin, Lubbock, for appellee.

LUMPKIN, Justice.

In this suit the plaintiffs, H. Winston Hull and Charles C. Green, seek to recover from the defendant, James Fitz-Gerald, Jr., upon the theory of a constructive trust, an undivided one-half interest in a certain oil and gas lease covering seven tracts of land located in Hockley County, Texas. These tracts are owned by W. T. Coble and hereafter will be referred to as the Coble lands.

After the introduction of plaintiff' testimony in a trial before a jury, the court peremptorily directed a verdict in favor of the defendant and rendered judgment accordingly. To this judgment the plaintiffs duly excepted and have perfected their appeal to this court.

The plaintiffs Hull and Green were employees of the Texas Gulf Producing Company, a corporation engaged in the production of oil with its general offices at Houston. Hull was the Company's land man in West Texas, while Green was a district geologist. The defendant Fitz-Gerald was an independent oil operator. The three men were friends of long standing and had had many business dealings with each other. Their homes and offices were located at Midland, Texas.

During the period covered by this suit, the plaintiffs had an agreement with their employer, Texas Gulf Producing Company, that they could enter into transactions involving oil and gas leases as their separte business. These transactions were to be submitted first to their employer, but if the transaction, or deal, was refused by their employer, then the plaintiffs were free to make for themselves whatever kind of contract they wished.

The plaintiffs alleged that early in May of 1947 they had become interested in several areas of land in Hockley County, including the Coble lands, as possible locations for oil and gas production. On May 27, 1947, according to the plaintiff's pleadings, the defendant approached Hull and Green with the suggestion that the three procure oil and gas leases on likely property in West Texas. The plaintiffs told defendant of their interest in the Coble lands and exhibited to him a map or plat which showed the location of property in Hockley County likely to produce oil and gas. On this occasion the plaintiff Green informed the defendant that he had conducted a detailed study of this area and that in his opinion as a geologist the area had great possibilities for the production of oil and gas.

The plaintiffs alleged that on May 27, 1947, and at subsequent conferences, they entered into an oral agreement with the defendant. In substance the agreement provided that the defendant would ascertain what lands in Hockley County, specifically the Coble lands, were available for oil and gas leases; that the information concerning these proposed leases was to be submitted to the Texas Gulf Producing Company, but that if these transactions were not accepted by the Company, then Fitz-Gerald, Hull and Green would take the leases for themselves and resell or handle them as joint adventurers for their joint profit. The plaintiffs' allegations continue:

'It was the agreement of the parties plaintiffs and defendant that the title to such properties * * * should be taken in the names of all three of them, with the oral understanding and agreement that plaintiffs jointly should have an undivided one-half interest therein and the defendant should have an undivided one-half interest therein; that plaintiffs, as between the parties, should be obligated jointly for onehalf of the total obligations incurred by reason of the acquisition of oil and gas contracts on such properties, the defendant should be obligated for one-half of such total obligations so incurred, and the profits or losses to be shared in like proportion, that is to say, one-half thereof jointly by or to plaintiffs and one-half thereof by or to the defendant.'

The plaintiffs further alleged that the defendant learned that W. T. Coble was willing to lease portions of his property in Hockley County. The defendant conveyed the general terms of the proposed lease on the Coble lands to the plaintiffs, who submitted these terms to the Texas Gulf Producing Company. The Company declined Coble's terms. This information, the plaintiffs alleged, was conveyed to the fefendant together with information that the plaintiffs were free to contract for an oil and gas lease on the Coble lands. After this message from the plaintiffs, the defendant entered into negotiations with A. W. Thompson and Pat M. Carr to determine if the firm of Thompson, Carr & Forster, drilling contractors, would accept, as payment for drilling, an assignment of an interest in a lease contract on the Coble lands. Thompson, Carr & Forster agreed that they would accept an undivided onehalf interest in the lease contract and that in the event the first well drilled was nonproductive, the cost of drilling would be the sole expense of Thompson, Carr & Forster. After reaching this agreement with the drilling contractors the defendant, on July 2, 1947, obtained in his name only a lease from Coble on the seven tracts of land.

In his answer, among other allegations, the defendant denies that he ever had a partnership arrangement with the plaintiffs concerning the Coble lease.

The defendant's motion for an instructed verdict was in three parts: (1) That the purported oral agreement of May 27, 1947, was in violation of the Texas Securities Act, Article 600a, Vernon's Annotated Civil Statutes; (2) That the alleged oral agreement by which the plaintiffs seek to impress an oral trust upon the oil and gas lease from Coble to the defendant is an expressed parol trust prohibited by the Texas Trust Act, Article 7425b-7, Vernon's Annotated Civil Statutes; (3) That the terms of the purported oral contract between the plaintiffs and the defendant are too vague and uncertain to impose a parol trust upon the Coble oil and gas lease.

In discussing the several points of error presented by the plaintiffs, we shall first direct our attention to the third portion of the defendant's motion for an instructed verdict. In it the defendant contends, in effect, that the alleged agreement of May 27, 1947, is too vague and uncertain to constitute a valid oral contract; that the purported oral agreement does not show a mutual assent of the parties to the same thing, in the same sense, at the same time. We cannot agree with the defendant in this contention.

In determining whether a trial court's action in granting a motion for a peremptory instruction was proper, the appellate court will view the evidence in the light most favorable to the losing party, will disregard the conflicts in testimony, and will indulge, in favor of the appellant, every intendment reasonably deducible from the evidence. White v. White, 141 Tex. 328, 172 S.W.2d 295. When an appeal is from a judgment on an instructed verdict for the defendant, the controlling question is whether there is any evidence in the record which, when considered by itself, would, if accepted by a jury, have raised an issue of fact which would have supported a judgment in favor of the plaintiff. Continental Ins. Co. v. Johnson, Tex.Civ.App., 216 S.W.2d 635, writ. ref. However, an appellate court will not reverse a judgment based on an instructed verdict unless the appellant demonstrates that there is sufficient evidence to support fact-findings in accordance with his cause of action. Neyland v. State, Tex.Civ.App., 151 S.W.2d 331.

Whether an agreement to acquire an oil and gas lease on the Coble lands existed between the parties after their conversation of May 27, 1947, is a question of fact. Viewed in the light most favorable to the plaintiffs, the evidence bears out the plaintiffs' allegations, i. e., that the parties agreed that Fitz-Gerald was to work out the 'best possible deal' for an oil and gas lease on the Coble lands and that if Coble's terms were not acceptable to the Texas Gulf Producing Company, than the lease was to be taken in the names of the three men. Fitz-Gerald was to obtain as much of the land designated by Green, including the Coble lands, as was available for oil and gas leases.

The conversation between the three men on May 27, 1947, was described by the plaintiff Hull in the following words:

'The conversation in general and in substance in the office that afternoon was to the effect that Jim (Fitz-Gerald) was to take the Coble acreage, he was to make the best possible deal he could if the deal was available, he was to convey to me the information as to the best possible deal he could make with the Cobles, and he was to make that deal in such a was that I would have an opportunity to convey that information to my main office and also in such a way that in the event Texas Gulf rejected the deal that Cobles made, he would still have an opportunity to take the lease in our names, Fitz-Gerald, Green and Hull, so that the three of us, as individuals, could make some acquisition for ourselves.'

It appears that the defendant Fitz-Gerald had in his employ one Hollums. Several days after the conversation reported above, Hollums reported to the plaintiff Hull. Hull's testimony continues:

There was a matter of a few days there that nothing was apparently done because it was several days later that Mr. Hollums reported to me that certain of the acreage in the recommended area was not then available for lease. It had been leased a matter of a few days prior. That information was conveyed on to the Houston office. The first information that I had from Mr. Fitz-Gerald concerning the Coble lands proper was when Mr. Hollums called me the latter part of June...